As a restaurant owner, you’re likely familiar with third-party apps like DoorDash, Uber Eats, and Grubhub, which can charge commissions as high as 30% per order. These apps seem to bring in new customers, but at what cost? While you might think their customers come from traditional advertising, there’s a hidden strategy at play: data scientists are helping these apps collect and buy customer data to target your loyal patrons. In this article, we’ll explore how third-party apps get your customers, often in ways you don’t realize, and how this impacts your restaurant’s profits. This is part one of our series, How Data Scientists Took Over the Restaurant Industry.
The Obvious Ways Third-Party Apps Get Customers
Third-party apps rely on traditional marketing to build their user base. You’ve probably seen their efforts:
- Billboard ads: Bright, eye-catching signs promoting free delivery or discounts with DoorDash or Uber Eats.
- TV commercials: Ads showcasing the convenience of ordering through their apps, often featuring popular restaurants.
- Brand awareness campaigns: Sponsorships, social media influencers, and partnerships with events to keep their names top of mind.
These methods are expensive and visible, so it’s easy to assume they’re the main way apps like DoorDash and Grubhub attract customers. But the truth is, traditional advertising is just the tip of the iceberg. The real strategy lies in data collection—and it’s happening behind your back.
The Hidden Way: Buying and Collecting Your Customer Data
Third-party apps don’t just rely on ads—they use data scientists to collect and buy real-time customer information, including emails, phone numbers, addresses, order preferences, and buying habits. This data allows them to target your customers with precision marketing, pulling them into their high-commission apps. Here’s how they get this data:
1. Buying Data from No-Commission Platforms
Platforms like ChowNow and Toast, which offer no-commission online ordering, often share customer data with third parties. For example, ChowNow’s Privacy Policy states they share “Other Information” about user activity with third-party advertisers and remarketers. Similarly, Toast’s Privacy Statement notes they share data with “business partners” and “service providers.” These third parties could include data brokers who sell the information to DoorDash, Uber Eats, or Grubhub, who then use it to target your customers with ads or emails at the perfect time—like a dinner deal right before they’re hungry.
We dive deeper into how no-commission platforms sell your customer data in our article, How No-Commission Ordering Systems Sell Your Customer Data to Big Tech.
2. Creating Free Products to Mine Data
Third-party apps also offer “free” products that seem to benefit restaurant owners but are designed to collect customer data. For example, DoorDash Storefront provides a no-commission, no-monthly-fee ordering system with features like a store locator map. While this sounds great, DoorDash uses the platform to gather detailed customer data—emails, addresses, order habits—and feeds it into their marketing machine to drive re-orders through their high-commission app. This tactic turns your customers into DoorDash’s customers, costing you more in the long run.
Learn more about this strategy in our article, How DoorDash Storefront Uses Data Mining to Target Your Restaurant Customers.
How This Hurts Your Restaurant
When third-party apps buy or collect your customer data, they use it to build loyalty to their platforms, not your restaurant. For example:
- Higher commissions: Customers targeted by DoorDash or Uber Eats are more likely to order through their apps, where you pay 15-30% per order.
- Loss of loyalty: Programs like DoorDash’s DashPass offer free delivery, incentivizing customers to use their app instead of ordering directly from you.
- Legal risks: If customer data is shared without clear consent, you could face privacy law violations under regulations like California’s Consumer Privacy Act (CCPA).
These apps aren’t just delivering food—they’re using data science to take over your customer relationships, leaving your restaurant struggling to compete.
What Can Restaurant Owners Do?
To protect your restaurant, avoid platforms that share customer data with third parties. Instead, choose white-labeled, no-commission platforms that prioritize your business, such as:
- Food Order Pro: Offers commission-free ordering with ADA-compliant websites and no data sharing with third-party apps.
- BentoBox: Provides commission-free ordering with customizable websites and secure data practices.
Be cautious of “free” products from third-party apps, and always read the privacy policies of any platform you use. Your customers are your most valuable asset—don’t let data scientists take them away.
Protect Your Restaurant’s Future
Third-party apps like DoorDash, Uber Eats, and Grubhub use more than just ads to get your customers—they rely on data scientists to buy and collect real-time customer information from platforms like ChowNow and Toast, or through free products like DoorDash Storefront. This series, How Data Scientists Took Over the Restaurant Industry, will dive deeper into these tactics. Check out our next articles: How DoorDash Storefront Uses Data Mining to Target Your Restaurant Customers and How No-Commission Ordering Systems Sell Your Customer Data to Big Tech.
Ready to take control of your online ordering? Contact Food Order Pro for a demo to find a solution that keeps your customers safe and loyal.
